JAMIE CHANG | PROFESSOR KEN STEVENS | SENIOR SEMINAR: ENTREPREURSHIP | SPRING 2012
TABLE OF CONTENTS 1. executive summary 2. domain 3. problem area 4. market analysis 5. competitive analysis 6. products and services 7. sales & marketing strategy 8. financials
marked. allows its customers to customize and personalize men’s
WEBSITE: themarkedman.com INDUSTRY: Men’s Apparel FOUNDED: May 2012 REGISTRATION: NY State C-Corporation
JAMIE CHANG 200 West 24th St, 4B New York, NY 10011 (732) 910-8512 email@example.com
FINANCIAL INFORMATION OVERVIEW: Seeking funding for start-up capital CAPITAL INVESTED TO DATE: $25K from founder LOAN SEEKING: $100 K
JAMIE CHANG, FOUNDER & CEO Background in design management and graphic design. Student at Parsons the New School for Design, majoring in design + manangement EXPERIENCE Zang Toi (2011-2012) Fashion Michael Kors (2011) Marketing/ Creative Services Soxland Int’l (2010, 2011) Sales & Visual Merchandising Fingerprint Communications (2009) Public Relations EDUCATION Parsons the New School for Design BBA, Design + Management, Chase & Dean’s Scholar, Candidate Fall 2012 John P. Stevens High School GPA: 3.65/4, National Honor Society & Future Business Leaders of America (elected executive board member of 70+ member club)
KEYS TO SUCCESS
Dedicated, passionate, and ambitious Background in fashion and hosiery industry with an eye for merchandising and design Competitively differentiated offering in growing market Strong customer focus and loyalty
luxury hosiery products. We seek to provide men with an opportunity to express their style through the subtle element of hosiery. marked. aims to provide its customer with quality products that reflect its customers’ personalities and style.
CUSTOMER PROBLEM: Currently, there is no men’s hosiery
brand that is exclusive to men. Research on the industry reveals an opportunity to develop a brand that caters solely to men that will allow them to express and claim ownership to their fashion and conscious purchasing and style decisions.
PRODUCT AND SERVICE: marked. offers its customers the
opportunity to customize their hosiery to reflect their style. Through an interactive retail website, the marked. customers can personalize hosiery by choosing the material content, style, and design of their liking. As a finishing touch, marked. offers an optional monogramming service, allowing the marked. man to have proprietorship of his product. Made only with the highest quality yarns, the marked. customer can be confident that his marked. product will be well worth its value.
TARGET MARKET: The marked. man is any man who wishes
to express his style through subtle details. While there is no age specification, the marked. customer is most likely above the age of 20; however, the main characteristic of the customers is that they are confident in who they are and in their style. The marked. customer has a more flexible discretionary income and can afford to purchase a luxury product that is not absolutely necessary but that offers a personal value proponent. The marked. customers may also be individuals in search of a thoughtful, personal, yet affordable gift.
CUSTOMERS: 0 to date. SALES & MARKETING STRATEGY: marked. will initially be sold
directly online, through themarkedman.com. Ultimate goal will be to open small retail shops. Initially, marketing will be conducted primarily on the Internet, with ads on men’s style sites/blogs and men’s online retail sites. Collaborations with sites like Gilt.com and various men style bloggers would offer sales and marketing opportunities as to raise awareness of the brand.
BUSINESS MODEL: marked. products will be manufactured
domestically as to ensure quality and a more reliable delivery system. As most products will be made to order, the markup will be 250% of the total cost/product. As an online retailer, it will not be necessary to rent a big operation space, so fixed costs will be relatively low. The target gross margin percent is approximately 72%.
COMPETITORS: Current competitors include contemporary fashion
brands that sell men’s socks like Paul Smith, BOSS, Marc by Marc Jacobs, etc through specialty and department stores. Established highend hosiery brands like Wolford and FALKE are also beginning to expand their men’s products which can be threatening.
COMPETITIVE ADVANTAGE: marked. is the only brand positioned
as a personalized, luxury men’s hosiery brand. The brand is different than any other currently on the market because it allows the customers to make their own design decisions to their own preferences. With competitive pricing and added value proposition of personalization, marked. offers an entirely new style and shopping experience.
FINANCIALS (PROJECTED): revenues expenditures net
DOMAIN MEN’S APPAREL INDUSTRY
The men’s apparel industry consists of men’s active wear, essentials, formal wear, outer wear, and casual wear. The companies responsible for manufacturing and distributing men’s apparel create the clothing from fabric purchased from textile companies. These companies not only purchase the fabrics, but they design the clothing, and create samples to display before finishing the product. Men’s apparel wholesalers typically purchase the clothing goods from manufacturing companies, and then proceed to sell the apparel to retailers. The retail stores specializing in men’s apparel will at times offer additional services to consumers, such as alternations that may be needed in order for the men’s apparel to precisely fit a consumer. Men’s apparel companies also have to consistently modify the apparel they produce in order to meet consumer trends and demand. For example, manufacturing clothing that incorporates recycled material, or electronic functions (such as small lights in the clothing). Consumer preferences and demand are the predominant drivers for the men’s apparel industry, but manufacturing costs are also a factor. Profitability depends upon several factors as well: location, specialization of products, efficiency of operations, and contracts with marketing professionals. As competition is steep, apparel companies often create alliances. Successful advertising strategies, as well as concentration in specialized markets help in allowing apparel companies to generate increased revenue.
MEN’S ACCESSORIES INDUSTRY
Fashion accessories are now being increasingly used by men of different age groups to complement, enhance their apparel, personality and look. The history of men’s fashion accessories can be traced to the early 16th century with men wearing hats, turbans, stoles etc to complement their apparels. Over the centuries, though the trend in fashion accessories have been witnessing a continuous change, but these items have been indispensable for men of different age groups and strata. Men’s fashion accessories comprises of different items that are used for enhancing the attire or look of the wearer. The category includes the following: necktie, belts, wallets, aftershaves and perfumes, jewelry, cravats, caps/hats, cuff links, watches, sunglasses, footwear, hosiery, etc. The fashion accessories industry for men is rapidly growing globally. The industry is being driven essentially by the change in the preferences of men and the fact that men have become more fashion conscious. Both local and large international companies are investing large amount of money in manufacturing different men accessories in a variety of materials and styles in response to the surge in demand of such products in the international market, a result of rising middle class income in countries such as India and China.
PROBLEM AREA A LITTLE STORY OF HOW marked. CAME TO BE
My preliminary ideas played significant roles leading me to my final entrepreneurial idea. Beginning with a desire to rebrand my father’s hosiery importing company, I was gently pushed towards a more entreprenuerial effort. The first concept I developed was a high-end female hosiery brand called “kitschy.” Kitschy was meant to target a very specific target market of younger women with large disposable incomes (most likely because of their family’s financial situations). Kitschy’s designs leaned more towards the vintage aesthetic but the products would be of high quality, aiming to be sold in department stores like Saks Fifth Avenue, Bloomgindale’s, Neiman Marcus, etc. as well as boutique stores. Debut of the concept of Kitschy was not particularly successful. The most important question I was asked, that ultimately led me to marked. was, “Do we really need another women’s luxury hosiery line? What about men’s?” The question was asked by a constituent of the target market marked. now addresses therefore indicating an opportunity for me to resolve the problem. Having already explored the men’s hosiery industry in the context of my father’s business, it had not occurred to me to respond to this market gap I was already aware of through my entrepreneurial proposition. With substantial peer feedback and suggestions, I began to streamline the marked. to accomodate a specialty market.
Currently on the market, there is no men’s hosiery brand that is exclusive to men. Many brands have added men’s lines, but none are dedicated to creating products with a focus on men’s accessories, especially hosiery. There is an opportunity to develop a brand that caters solely to men that will allow them to express and claim ownership to their fashion and conscious purchasing and style decisions. There is definitely a growing market for such a product and service as men are becoming increasingly more aware of their fashion and style choices. In addition, dipping into the novelty gifting market, there is an opportunity to create a service and product that can be affordable yet luxurious, convenient yet thoughtful and personal.
MARKET ANALYSIS RESEARCH METHODOLOGY
My research and data procurement methods consisted of interviews as well as analysis of men’s style trends seen through men’s style blogs.
I completed three interviews. My interviews consisted of only four simple questions as well as casual conversation that gave me insight into their buying behaviors. INTERVIEW QUESTIONS: 1. how would you describe your style? 2. what is your perspective on socks as an element of your style? 3. would you be willing to pay around $40 for a pair of well-designed, quality socks? 4. would a customizable apparel service be appealing to you? Interview 1 JOHN LU age: 21 occupation: student at University of Illinois Urbana-Champaign, engineer major 1. I’m a JCrew kind of guy. I try to look effortlessly well dressed. (The ladies like that.) 2. To be honest, I haven’t really paid that much attention to socks till recently. I’ve been seeing a lot of cool things happening on blogs. It seems to becoming more popular. I think I’m going to start buying some less boring socks. 3. Maybe once I start working. Like I said before, I never really saw it as a style statement until lately. Right now, as a student with no income coming in, $40 for a pair of socks is a bit unnecessary. 4. Yeah, again, maybe once I start working. It’d be cool to go around with stuff I know is uniquely mine. insights: A good friend of mine, I know that John is very aware of his style and fashion choices. As a student with a family of middle-upper financial status, price is an important factor in his purchasing habits. Interview 2 BRUCE CHOU age: 33 occupation: managing director of shoe manufacturer in Taiwan 1. Simple. I’m not incredibly stylish but I appreciate good taste. I just try to make sure everything matches and I stray away from loud patterns and colors. 2. I’m in the shoe industry, so socks can be nice complements to shoes. I almost never wear white socks. I like to wear patterned socks in neutral colors so I can be a little adventurous but not too much. 3. Sure, if it’s really high quality and well designed, $40 is not absurdly priced. 4. Yes, every now and then it would be nice to have something I can distinctly call my own. insights: Bruce is not as fashion forward but he still has subtle style. He has a flexible disposable income so he can afford more luxurious items.
Interview 3 KEVIN CHRISTENSEN age: 50 occupation: human resources director at foreign telecom company 1. Clean, tailored, classic. 2. I work in a very corporate environment so I like to have fun without being obnoxious. I love buying socks with cool patterns and textures. Lately, I’ve been drawn to more bold colors. 3. Definitely! That’s how much I pay now for Paul Smith socks. 4. I always get my suits custom made, so I am an advocate of making sure everything fits perfectly and is, well, me. insight: Kevin is extremely successful professionally so he has no hesitations when it comes to purchasing things he does not need but likes. STYLE BLOG ANALYSIS I was not as familiar with men’s fashion trends prior to conducting research. I had previously done some shopping reports for my father so I was aware of the retail trends, but I had not paid particular attention to whether or not those trends were parallel to current street style trends. To answer my questions, I turned to style blogs. Although the fashion blogosphere is still dominated by women bloggers, there is a growing men’s fashion blogging community. For hours, I looked through various style blogs like Justin Chong Photography, Jak and Jil, the Sartorialist, etc. Men’s fashion, which used to be a side note, is coming more into focus on these blogs. Scott Schuman of The Sartorialist dedicated a post to socks saying, “Socks should always complement and never dominate the look.” I compiled a moodboard based on what I saw in the blogs:
I identified the main driving force to be the growing interest in men’s fashion. Men are becoming more fashionably aware and most women appreciate welldressed men. This has a positive impact on my business because it means that I have more potential customers.
KEY CUSTOMERS The target customer is essentially any man who wishes to express his style
through subtle details. With no real limitations to age, income/financial standing is most likely what will determine who the marked. customer is. To illustrate who the customers may be, I created 3 personas:
ROBERTO AGE: 35 | Florence, Italy HIS STORY: After spending a decade in Milan, Italy working at a menswear company, Roberto returned to his hometown of Florence, Italy to run his father’s watch company. Roberto has been interested in men’s fashion since a young age and appreciates the growing interest in the industry. To him, fashion is about tastefully combining classical pieces with playful prints, always making sure everything is perfectly fit and tailored. His wife, Elena, is an editor at Harper’s Bazaar Italia.
SIMON AGE: 25 | New York, New York HIS STORY: Simon is a first year graduate student at the Tisch School of the Arts at NYU. As an undergraduate student at Swarthmore College, Simon majored in English Lit. After a brief career as a freelance writer, Simon decided to pursue his passion for theatre. He enjoys riding his bike around the city, exploring new neighborhoods and people watching. Although quiet, Simon is charasmatic and well liked among his peers. His style is daintily fun with distinct character.
MATHIEU AGE: 29 | London, UK HIS STORY: Originally from Paris, France, Mathieu moved to London to complete his MBA at the London School of Economics. Currently, he works at Goldman Sachs in risk management. In his spare time, Mathieu enjoys reading in cafes, culinary adventures, and spending time with his girlfriend, Chloe. He finds style inspiration from his late grandfather who was a tailor with a wealthy clientele in Paris. He prefers to express his style subltely primarily through his accessories.
SWOT ANALYSIS strengths
personalized high quality interactive purchasing experience focused on menâ€™s market unique and new to market men wear socks year round design competitively priced
target market is lifestyle based want, not a need established brands are competition production costs are high
growing menâ€™s market can market in novelty gift market target market is lifestyle based
high threat of new entrants high threat of substitutes
MARKET MAP HIGH QUALITY
COMPETITVE ANALYSIS Amidst doing research on men’s socks, I found that currently there are many brands starting men’s socks lines. Brands such as March by Marc Jacobs, Paul Smith, BOSS, and Polo Ralph Lauren sell socks in higher end departments stores like Bloomingdales. The luxury hosiery brand Wolford has also recently launched some men’s products. FALKE has a pretty large men’s product line that sells basic and patterned socks of various forms. The average price for socks in Bloomingdales is around $25 and many are sold in 3-pair packs. Wolford prices knee-highs for over $40 and basic cotton socks for $36. FALKE prices are pretty reasonable, ranging from 8 to 39 UK pounds. The target market for all these competitors is more high-end and older. Paul Smith is known for his colorful patterns. Most of the brands with men’s socks right now are European brands, so there may be opportunity to create a high-end American socks brand.
PORTER’S FIVE FORCES threats of new entrants growing market, so high threat many established brands launching/ expanding men’s lines
bargaining power of suppliers growing market, so more options men’s hosiery have higher production costs than women’s
current competition Wolford Falke Paul Smith Marc by Marc Jacobs Boss
threats of substitutes cheaper men’s socks (i.e. Macy’s Alfani)
bargaining power of buyers many options how much are men willing to pay? quality and design > price?
PRODUCTS & SERVICES THE PRODUCT marked. offers its customers the opportunity to customize their hosiery to
reflect their style. Through an interactive retail website, the marked. customer can personalize hosiery by choosing the material content, style, and design of their liking. As a finishing touch, marked. offers an optional monogramming service, allowing the marked. man to have complete ownership of his design and style. Made only with the highest quality yarns, the marked. customer can be confident that his marked. product will be well worth its value. To begin, it will be an online retailer. It will work as a “sock bar.” Customers will be able to choose the material content (i.e. silk, cashmere, cotton, etc), styles (i.e. crew, ankle, knee-high, etc), and design (i.e. pattern, texture, color, etc). Additionally, customers will have the option to monogram their purchase. The website will take the customers through each step. Before confirming their purchase, they will see a computer-generated sample of their purchase. Each pair will be packaged in small boxes. There will also be a gift-wrapping option where customers can include a personalized message and have the box wrapped. In all, this service aims to produce products that are not only unique but give a feeling of subtle and affordable luxury.
THE NAME I decided on the name “marked.” because this entire business is created
on the foundation of customization/personalization. Whether or not the customers decide to monogram their products or not, the product will still be customized because the design elements were chosen by them.
ADOBE GARAMOND PRO adobe garamond pro COLORS
FRANKLIN GOTHIC BOOK franklin gothic book
R: 224 G: 195 B: 67
THE WEBSITE MOCKUP
marked. © 2012
marked. © 2012
marked. ÂŠ 2012
marked. ÂŠ 2012
marked. © 2012
CHOOSE THREAD COLOR
marked. © 2012
SALES & MARKETING STRATEGY SALES marked. will initially be sold directly online, through themarkedman.com. If the site is successful, marked. will try to move some products into higher-end
department stores like Bergdorf Goodman, Neiman Marcus, Saks Fifth Avenue, Barney’s, etc. Customers would be able to purchase already made designs as well as place custom orders that would be produced in a separate location and mailed to them. If the products are successful in department stores, the next level would be to open small retail shops. Retail locations could offer on location monogramming services in addition to everything else that is offered in the department stores. The retail stores would be able to carry much more inventory. If the hosiery products are successful, marked. could expand product lines to include other accessories (such as ties, scarves, etc ) that would also be customizable and personalized. With a strong brand, there would be many potential outlets.
MARKETING Initially, marketing will be conducted primarily on the Internet, with ads
on men’s style sites/blogs and men’s online retail sites like MRPORTER.com. Collaborations with sites like Gilt.com and various men style bloggers would offer sales and marketing opportunities as to raise awareness of the brand. Guerilla marketing efforts may include creating a mobile app that allows potential customers to interact with the design process. Public relations efforts would include gifting products to celebrities, bloggers, editors, and other leading figures in the fashion industry.
The base price for my products is $35 for organic cotton, solid color, and no monogram. From there, each material increases incrementally by $5. Therefore: bamboo/nylon is $40, silk is $45, and cashmere is $50. Because it is more complicated for the machines to create patterns, patterned products will be $5 more. The final monogramming option is an additional $10. So, if a customer were to order a silk, argyle, monogrammed pair of socks, it would cost $60 plus tax and shipping. Gift packaging will be an added option costing $7. The prices are pretty high because each product will have to be made to order and they will be manufactured domestically in North Carolina, which means that labor costs will be much higher than if the products were manufactured overseas. The markup price will be 250% of the cost of goods. Essentially, the most basic product priced at $35 should cost $10 to manufacture, ship, etc. As an online retailer, it will be important to spend more money on developing the website. I estimated costs for the website to be $5000 which would include the design, domain name, shopping cart, etc). Another large expediture would be on advertising/marketing as it will be important to make people aware of the brand. I have included a general break down of the startup costs below.